Canadian ETFs attract $5B in flows in January

Canadian ETFs gathered a “strong” $5 billion in assets in January, with flows suggesting a growth-to-value rotation, National Bank Financial said in its monthly report, released Thursday.

Equities funds dominated, with inflows of $4.6 billion — 90% of January’s total. As has been the trend, market cap–weighted passive funds were most popular ($3.5 billion).

The report noted a rotation from growth into value — potentially in response to anticipated tighter monetary policy. For example, the tech sector had a rare month of outflows ($146 million) versus inflows for financials ($199 million) and energy ($147 million).

Of note, the TD Global Technology Leaders Index ETF had outflows of $183 million — the largest monthly outflow since its inception, the report said.

Fixed-income funds gathered $98 million. The threat of tighter monetary policy pushed investors out of “duration-risky” categories like aggregate bond ETFs and into cash alternative and short-term ETFs, the report said.

The multi-asset category had $439 million in monthly flows, while commodity ETFs had another month of outflows ($187 million, led by gold bullion ETFs).

The relatively new cryptoasset category also suffered, with outflows of $68 million, as Bitcoin and Ethereum prices dropped by half from recent peaks, the report said.

A record number of new ETF launches — 37 — kicked off the year, 19 of which were environment, social and governance funds.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.